buckeyegrad
Don't Immanentize the Eschaton
From today's Chronicle of Higher Education:
U. of Phoenix Buys Naming Rights to a Pro-Football Stadium
By GOLDIE BLUMENSTYK
Following in the path of Enron, FedEx, and Reliant, the University of Phoenix has bought the naming rights to a National Football League stadium, it announced on Tuesday.
Phoenix's $154-million, 20-year deal with the Arizona Cardinals makes it the first university to strike a stadium deal in which the university is paying out the millions rather than receiving them.
The deal is the second-most-lucrative in the NFL, after the Houston Texans' 30-year, $300-million deal with Reliant Energy. Still, even with Phoenix making average annual payments of $7.7-million a year, the expense will amount to only about 3 percent of the $250-million the university's parent company spends annually for advertising and promotion. It spends about the same on recruiting students. Its overall revenues exceed $2-billion.
"This just underscores how much of a marketing titan they are," said Sean Gallagher, an analyst of the higher-education market with Eduventures Inc., a consulting company that works with for-profit colleges. "This is saying that Phoenix is in the same category as those large-scale marketers" that use such deals to build their brand-awareness, he said.
The size and novelty of the arrangement also prompted some pointedly critical reaction.
Howard M. Block, an analyst with Banc of America Securities, said that the university and its parent company, the Apollo Group Inc., would do better to put the money toward programs that would improve Phoenix's graduation rate for first-time students, which has been declining ever since it began recruiting younger students (The Chronicle, July 2, 2004).
"More investment in academic outcomes would translate into more credibility and lower acquisition costs than stadium deals," Mr. Block wrote in a report on Tuesday. "Reputable schools with brand equity need not invest in stadium deals, as those schools' graduates sell themselves, aided by the brand equity of their alma maters."
The 63,000-seat, glass-and-metal-clad stadium, located in the Phoenix suburb of Glendale, cost $455-million and opened this fall as Cardinals Stadium. It will be renamed University of Phoenix Stadium.
Brian Mueller, president of the Apollo Group, said the deal is part of a larger advertising and marketing push for the Phoenix-based company and its flagship institution, which is celebrating its 30th anniversary this year. With 250,000 students, the University of Phoenix is the largest private university in the country.
The university is also bulking up its already substantial cadre of recruiters. Since March it has added at least 600 recruiters for its online division, bringing the total companywide to about 4,200. By March 2007, it expects to employ some 4,900 recruiters who will be part of what Mr. Mueller described at an investor conference this month as the company's "expanded and revamped sales organization."
The company is also planning an eight-month national television advertising campaign, which will commence in January (when advertising prices go down after the November elections and the Christmas season). The company will be developing 30-second and 60-second commercials that will run in prime time, Mr. Mueller said, and will spend as much as 12 percent of its monthly advertising budget on the campaign. The television campaign will complement the university's already-heavy advertising presence on the Internet, he said.
Mr. Gallagher, of Eduventures, said the stadium deal symbolizes how "marketing centric" the for-profit higher-education industry has become. He said the move was a departure for Phoenix, which, like other for-profit higher-education companies, has typically spent its advertising and promotional money on activities that produce more-direct returns, such as campaigns that produce names and contact information of prospective students.
"It certainly calls attention to their brand-building effort," he said.
In marketing, the University of Phoenix has been a trendsetter for the for-profit higher-education industry. For example, after Phoenix began building up its brand name by making sure the office buildings that house its hundreds of campus locations feature the university name and logo on spots that can be seen from nearby interstates, most of the other companies began doing the same thing.
But Mr. Gallagher said he doubted that other companies would copy this technique, largely because few, if any, could afford to do so. "I wouldn't expect that a couple of weeks from now, DeVry will go out and purchase rights to another stadium," he said. He also noted that the value of the deal to Phoenix would depend a bit on how well the Cardinals play. If they make the playoffs, the stadium will get more television exposure. The team's win-loss record so far this season is 1 and 2.
U. of Phoenix Buys Naming Rights to a Pro-Football Stadium
By GOLDIE BLUMENSTYK
Following in the path of Enron, FedEx, and Reliant, the University of Phoenix has bought the naming rights to a National Football League stadium, it announced on Tuesday.
Phoenix's $154-million, 20-year deal with the Arizona Cardinals makes it the first university to strike a stadium deal in which the university is paying out the millions rather than receiving them.
The deal is the second-most-lucrative in the NFL, after the Houston Texans' 30-year, $300-million deal with Reliant Energy. Still, even with Phoenix making average annual payments of $7.7-million a year, the expense will amount to only about 3 percent of the $250-million the university's parent company spends annually for advertising and promotion. It spends about the same on recruiting students. Its overall revenues exceed $2-billion.
"This just underscores how much of a marketing titan they are," said Sean Gallagher, an analyst of the higher-education market with Eduventures Inc., a consulting company that works with for-profit colleges. "This is saying that Phoenix is in the same category as those large-scale marketers" that use such deals to build their brand-awareness, he said.
The size and novelty of the arrangement also prompted some pointedly critical reaction.
Howard M. Block, an analyst with Banc of America Securities, said that the university and its parent company, the Apollo Group Inc., would do better to put the money toward programs that would improve Phoenix's graduation rate for first-time students, which has been declining ever since it began recruiting younger students (The Chronicle, July 2, 2004).
"More investment in academic outcomes would translate into more credibility and lower acquisition costs than stadium deals," Mr. Block wrote in a report on Tuesday. "Reputable schools with brand equity need not invest in stadium deals, as those schools' graduates sell themselves, aided by the brand equity of their alma maters."
The 63,000-seat, glass-and-metal-clad stadium, located in the Phoenix suburb of Glendale, cost $455-million and opened this fall as Cardinals Stadium. It will be renamed University of Phoenix Stadium.
Brian Mueller, president of the Apollo Group, said the deal is part of a larger advertising and marketing push for the Phoenix-based company and its flagship institution, which is celebrating its 30th anniversary this year. With 250,000 students, the University of Phoenix is the largest private university in the country.
The university is also bulking up its already substantial cadre of recruiters. Since March it has added at least 600 recruiters for its online division, bringing the total companywide to about 4,200. By March 2007, it expects to employ some 4,900 recruiters who will be part of what Mr. Mueller described at an investor conference this month as the company's "expanded and revamped sales organization."
The company is also planning an eight-month national television advertising campaign, which will commence in January (when advertising prices go down after the November elections and the Christmas season). The company will be developing 30-second and 60-second commercials that will run in prime time, Mr. Mueller said, and will spend as much as 12 percent of its monthly advertising budget on the campaign. The television campaign will complement the university's already-heavy advertising presence on the Internet, he said.
Mr. Gallagher, of Eduventures, said the stadium deal symbolizes how "marketing centric" the for-profit higher-education industry has become. He said the move was a departure for Phoenix, which, like other for-profit higher-education companies, has typically spent its advertising and promotional money on activities that produce more-direct returns, such as campaigns that produce names and contact information of prospective students.
"It certainly calls attention to their brand-building effort," he said.
In marketing, the University of Phoenix has been a trendsetter for the for-profit higher-education industry. For example, after Phoenix began building up its brand name by making sure the office buildings that house its hundreds of campus locations feature the university name and logo on spots that can be seen from nearby interstates, most of the other companies began doing the same thing.
But Mr. Gallagher said he doubted that other companies would copy this technique, largely because few, if any, could afford to do so. "I wouldn't expect that a couple of weeks from now, DeVry will go out and purchase rights to another stadium," he said. He also noted that the value of the deal to Phoenix would depend a bit on how well the Cardinals play. If they make the playoffs, the stadium will get more television exposure. The team's win-loss record so far this season is 1 and 2.
